A sharp and simultaneous rise in fuel prices has been recorded across Europe, triggered by the co-ordinated withdrawal of emergency subsidy schemes, whilst Poland, Germany and Spain are facing the most severe consequences.
In the spring, Europe introduced large-scale emergency measures en masse – direct fuel subsidies, a freeze on retail prices and a sharp reduction in VAT on petrol and diesel. From the start of July, these temporary schemes were phased out in a co-ordinated manner, restoring taxes to their previous levels and instantly driving up prices at petrol stations.
The scrapping of fuel subsidies, the lifting of price caps and the return of the 23% VAT from 1 July triggered an immediate market reaction. Social media was flooded with night-time photos from petrol stations showing the sharp jump in prices, whilst in Poland, diesel prices rose by a whole zloty at once.
Estimates of the scale of the fuel price rise forecast for Wednesday are divided: whilst the Finance Minister Andrzej Domański expects a moderate increase of 30-40 groszy, citing differences in petrol station pricing policies, market analysts at Reflex are forecasting a rise in the price per litre of petrol and diesel of 40-60 groszy.
In Germany, the scrapping of fuel subsidies worth billions has caused widespread concern at petrol stations ahead of a sharp rise in prices. Drivers rushed en masse to fill up their cars before the subsidies expired. To prevent price gouging, the Federal Cartel Office has stepped up monitoring of petrol stations and banned chains from unjustifiably inflating fuel prices under the pretext of tax changes.
The Spanish fuel market followed the same pattern observed in Poland and Germany: after the preferential 10% VAT rate officially expired on 30 June, the rate returned to the basic 21%, triggering an immediate surge in prices at local petrol stations.
